havent looked at any of the assignments but would assume if you make a payment at the start of the loan period ( in advance) there would be less loan amount for interest to be charged on and then less interest charged on it means the figure at the end of the period will be less and your next advance payment will therefore be lower and again less interest lower loan. This is how I would understand it loan of $1000 you make a payment of $100 ( in advance) making your total 900 lets say for ease sake interest of 5% is charged meaning end of the year loan would be $945. If you didnt make this payment then you would start with $1000 interest of $50 end of year being $1050 and then less $100 payment would mean year ending would be $950. Not sure if this is what you are asking but am trying to start getting the brain thinking as I have nearly finished reading the folder and will start with the webinars and assignments soon.
The early bird catches the worm, but the second mouse gets the cheese.
thanks your example helped clarify my thoughts. have finally finished all assessment and ready to send in. the assessment really challenge you to put some knowledge into practice now
Ive pasted the whole question however I really just want to know about this part. Simon is willing to offer vendor carry-back but wants 10% interest and monthly payments of the balance over five years, with the first payment upfront. Does this mean the whole loan will be paid out over the 5 years or that the repayments are based on a 30year time frame? Thanks in advance. Part One: Based on the variables below, calculate the vendor carry-back instalments Simon would receive assuming he funds the shortfall between what Ben can pay (i.e. his deposit and traditional finance).
> Ben pays his maximum deposit
> Ben also pays the finance he qualifies for: 80% LVR from the XYZ Bank at 7% interest, with monthly repayments (in arrears) over 30 years
> Simon is willing to offer vendor carry-back but wants 10% interest and monthly payments of the balance over five years, with the first payment upfront.
In your answer, explain at least two forms of security that Simon could ask for as collateral for the vendor carry-back loan.
The early bird catches the worm, but the second mouse gets the cheese.
I also found this confusing, but here's what I think:
Part One: asks you to work out the monthly installments assuming the outstanding balance is paid in full over 5 years.
Part Two: asks you to work out the monthly installments assuming the outstanding balance is paid in full over 30 years. However, Ben only pays these installments for 5 years, after which he makes a balloon (lump sum) payment at the end for the remaining amount.
Cheers
Dash
EDIT:
So I worked through this answer, and I'm coming up with an odd number for Part 2 - can anyone double check this is correct?
Vendor finance = $64,000
Months in 30yrs = 360
Min repayment per month = $177.78 (vendor finance amount / 360)
The trouble is, the interest per month exceeds the principal repayments, so the amount owed only keeps going up and up! That doesn't seem right, what am I doing wrong?
Hi Guys,
I am struggling to work out Capital gains tax when is comes to purchasing an existing property with the intent to renovate, subdivided and Sell.
I.e. Sell the house once renovated and also sell the subdivided parcel of land separately.
Purchase Price : $350K
Purchase Cost :$90K
Holding Cost: $17,500
Renovating Cost: $36K
Subdivision Cost: $17,500
Total Cost : $161K
My Question is how would one calculate the capital gains Tax payable on the project.
Since My intention will be two sell both properties, how do I distribute the cost to calculate capital gains tax!
Hello - I found a great website for calculating the repayments in advance for research assignment #3 http://www.pine-grove.com/online-calculators/amortization-schedule.htm
just put the loan date and the first payment date as the same date and this will show the first payment coming off straight away.
I'm struggling with what they are asking on this one. I presumed the first part Simon was just doing vendor carry back for the remainder of the deposit ben needs. Maybe I'm wrong. I'm confused. Anyone work this one out and can shed some light one it?
havent looked at any of the assignments but would assume if you make a payment at the start of the loan period ( in advance) there would be less loan amount for interest to be charged on and then less interest charged on it means the figure at the end of the period will be less and your next advance payment will therefore be lower and again less interest lower loan. This is how I would understand it loan of $1000 you make a payment of $100 ( in advance) making your total 900 lets say for ease sake interest of 5% is charged meaning end of the year loan would be $945. If you didnt make this payment then you would start with $1000 interest of $50 end of year being $1050 and then less $100 payment would mean year ending would be $950. Not sure if this is what you are asking but am trying to start getting the brain thinking as I have nearly finished reading the folder and will start with the webinars and assignments soon.
The early bird catches the worm, but the second mouse gets the cheese.
thanks your example helped clarify my thoughts. have finally finished all assessment and ready to send in. the assessment really challenge you to put some knowledge into practice now
Ive pasted the whole question however I really just want to know about this part. Simon is willing to offer vendor carry-back but wants 10% interest and monthly payments of the balance over five years, with the first payment upfront.
Does this mean the whole loan will be paid out over the 5 years or that the repayments are based on a 30year time frame?
Thanks in advance.
Part One: Based on the variables below, calculate the vendor carry-back instalments Simon would receive assuming he funds the shortfall between what Ben can pay (i.e. his deposit and traditional finance).
> Ben pays his maximum deposit
> Ben also pays the finance he qualifies for: 80% LVR from the XYZ Bank at 7% interest, with monthly repayments (in arrears) over 30 years
> Simon is willing to offer vendor carry-back but wants 10% interest and monthly payments of the balance over five years, with the first payment upfront.
In your answer, explain at least two forms of security that Simon could ask for as collateral for the vendor carry-back loan.
The early bird catches the worm, but the second mouse gets the cheese.
I also wanted to know whether it was the whole lot in 5 years or 30?
Hi Victor,
I also found this confusing, but here's what I think:
Part One: asks you to work out the monthly installments assuming the outstanding balance is paid in full over 5 years.
Part Two: asks you to work out the monthly installments assuming the outstanding balance is paid in full over 30 years. However, Ben only pays these installments for 5 years, after which he makes a balloon (lump sum) payment at the end for the remaining amount.
Cheers
Dash
EDIT:
So I worked through this answer, and I'm coming up with an odd number for Part 2 - can anyone double check this is correct?
Sale price = $420,000
Deposit = $20,000
80% LVR = $336,000
Balance = $84,000 (sale price - 80% loan)
Shortfall $64,000 (balance - deposit)
Vendor finance = $64,000
Months in 30yrs = 360
Min repayment per month = $177.78 (vendor finance amount / 360)
The trouble is, the interest per month exceeds the principal repayments, so the amount owed only keeps going up and up! That doesn't seem right, what am I doing wrong?
Hi Guys,
I am struggling to work out Capital gains tax when is comes to purchasing an existing property with the intent to renovate, subdivided and Sell.
I.e. Sell the house once renovated and also sell the subdivided parcel of land separately.
Purchase Price : $350K
Purchase Cost :$90K
Holding Cost: $17,500
Renovating Cost: $36K
Subdivision Cost: $17,500
Total Cost : $161K
My Question is how would one calculate the capital gains Tax payable on the project.
Since My intention will be two sell both properties, how do I distribute the cost to calculate capital gains tax!
Hello - I found a great website for calculating the repayments in advance for research assignment #3
http://www.pine-grove.com/online-calculators/amortization-schedule.htm
just put the loan date and the first payment date as the same date and this will show the first payment coming off straight away.
I'm struggling with what they are asking on this one. I presumed the first part Simon was just doing vendor carry back for the remainder of the deposit ben needs. Maybe I'm wrong. I'm confused. Anyone work this one out and can shed some light one it?
Will use all this useful infomation thanks!
"Just because you are doing more doesn't mean you are getting more done"